Fog of War Clouds Defense Contractors' Prospects

The worst of times can seem like the best of times for defense contractors. But they rarely benefit from scary headlines as much as their investors initially believe.

Two major suppliers to Western militaries, Northrop Grumman Corp. and General Dynamics Corp., will release quarterly results Wednesday, and they rise or fall on the usual corporate issues: earnings, new contracts, stock buybacks, etc. Northrop is seen expanding earnings...